1
                                                             
                           
                        DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
)       ISCR Case No. 09-02279
)
Applicant for Security Clearance
Appearances
For Government: Julie Mende , Esq., Department Counsel
For Applicant: Pro se
                                                                            
______________
Decision
______________
LYNCH, Noreen, A., Administrative Judge:
The Defense Office of Hearings and Appeals (DOHA) issued Applicant a
Statement of Reasons (SOR) alleging security concerns arising under Guideline F
(Financial Considerations) and Guideline E (Personal Conduct). The SOR was dated
January 11, 2012. The action was taken under Executive Order 10865, Safeguarding
Classified Information within Industry (February 20, 1960), as amended; Department of
Defense Directive 5220.6, Defense Industrial Personnel Security Clearance Review
Program (January 2, 1992), as amended (Directive); and the Adjudicative Guidelines
(AG) implemented in September 2006. 
Applicant timely answered the SOR and requested a hearing. DOHA assigned
the case to me on March 2, 2012, and the case was heard on April 19, 2012. A notice
of hearing was issued on March 21, 2012. Department Counsel offered 14 exhibits
(GE) 1-14, which were admitted without objection. Applicant testified and submitted 14
exhibits (AE) A-N, which were admitted without objection. DOHA received the hearing
transcript on April 27, 2012. Based on a review of the pleadings, submissions, and
exhibits, I find Applicant has not met his burden of proof regarding the security
concerns raised. Security clearance is denied.
2
Findings of Fact
In his answer to the SOR, Applicant admitted the factual allegations under
Guideline F (Financial Considerations). Applicant admitted SOR allegations 2.d through
2.f and 2.i and 2.j under Guideline E. 
Applicant is a 47-year-old employee of a defense contractor. He received his
undergraduate degree in 1984. He is single and has no children. Applicant has worked
for his current employer since February 2008. This is his first application for a security
clearance. (GE 1 )
Personal Conduct
In 1984, Applicant joined the military. However, in October 1984, he was given
an entry-level separation due to non-disclosure of illegal drug use. (GE 7) He claims
that he fully disclosed his high school drug use to recruiters at the station. He claims
that they told him to lie and not to list the drug use. He was not using drugs when he
enlisted. Applicant states that he was immature and did not realize the seriousness of
the situation. (TR. 81) The drug use in high school was limited to marijuana. (Tr. 114)
In 2001, Applicant admits that he used methamphetamine two to three times a
day for roughly one year. He claims that the use was not constant but it was habitual.
(Tr. 112)  He explained that he lived an area of the country which was the “meth capitol
of the entire  U.S.” He further noted that he avoided the use for a long time, but he did
make a mistake. Applicant was arrested for the drug use in February 2001. (GE 14) On
that day, he was eating lunch in his car. Police searched his car and found a quarter
gram of methamphetamine in his bag on the floor of his car. Applicant was in jail for five
or six days. The charges were eventually dropped. (GE 3) 
In September 2006, Applicant was arrested and formally charged with furnishing
alcohol to a minor. (GE 5) He states this was a case of entrapment. He states he did
not have an intent to commit a crime, but as he was going to buy some soda at a store,
he was approached “and talked into breaking the law” by a man that appeared to be of
age. Applicant claimed that he did not want to buy the beer for the man, but he
repeatedly implored him to do so. Applicant claims that it was a case of entrapment
because he said “no” more than once.  The charge was dismissed. He failed to appear
for the charges, and a bench warrant for his arrest was issued. (GE 3, 5) In October
2010, Applicant was fined for failure to appear.
Applicant has worked as a software engineer since 1994. He experienced
unemployment in 2005 or 2006. When Applicant was working for a large company in
April 2007, he was terminated for “gross misconduct.” Applicant agrees that the reason
given was gross misconduct, but he denies he committed any gross misconduct. He
states that he was fired rather than a more experienced technician. Applicant was on a
probationary period. He believes this was a wrongful termination. 
3
When Applicant was interviewed in 2008 as part of his security clearance
process, he had not yet filed his federal or state taxes for 1994 through 2007. (Tr. 88)
He led the investigator to believe that it was only the past ten years that he had not
filed. (Tr. 90)
On September 25, 2008, Applicant completed his security clearance application
(SCA). He answered “No” to Section 23. Your Police Record, question d. Have you ever
been charged with or convicted of any offense(s) related to alcohol or drugs?” He failed
to disclose his 2001 arrest and charge for possession of a controlled substance;
controlled substance paraphernalia; and under the influence of a controlled substance;
and DUI Alcohol/Drugs. Applicant was not credible when he explained that he did not
list the 2001 arrest because he was not “charged.” He stated he was arrested and
released. 
In that same SCA, Applicant, responded “No” to Section 27. Your Financial,
question c, “In the last 7 years, have you had a lien placed against your property for
failing to pay taxes or other debts?” He did not disclose the state tax liens entered
against him in February 2005 and September 2008. He did not have knowledge of the
tax liens at the time of his SCA. He was credible in his statement that he did not know
of the state liens until the OPM interview. He noted that his 2008 credit report did not
list the state liens. 
Financial Considerations
Applicant admits to failing to timely file his federal and state taxes for tax years
1994 through 2007. (GE 2) As a result of not filing the taxes, federal tax liens were
entered against Applicant in 1995, 1997,and 2010. The federal tax lien entered for 1995
was $6,961; for 1997, $55,509; and for 2010, $59,370. (GE 8, 9, and 10) State tax liens
were filed against Applicant in 1995, 2005, and 2008. (GE 11, 12) The original amount
of federal tax owed to the IRS is approximately $120,000. The amount of state tax is
approximately $42,377. (Tr. 32)
Applicant owed about $120,000 in federal taxes for the years 1994 through
2007, but half of the federal liability was forgiven due to statutes of limitations. The
amounts expired (released) prior to his addressing the tax issue in 2009.  (Tr. 106)
Thus, the outstanding federal tax lien filed in 2010 covers tax years 2001 through 2007,
for an amount of $62,515. (Tr. 107)
Applicant states that his financial problems began when he was working as a
contractor.  His reasons for not filing his tax returns for the number of years in question
vary from not having enough income to the fact that his employer forced him to be a
contract worker. (Tr. 92) Applicant was unemployed a full year in 1995, eleven months
in 1996, and made low wages in 1997. (Tr. 103) He states that since he did not owe
taxes for those years, he did not file. (Tr. 131) Applicant also did not believe this was
fair or legal and so he did not want to file until he could become a regular employee. He
admits that this was not a good reason not to file his taxes. (Tr. 44) He states that it was
4
not a smart thing to do, and he should have handled things differently. Applicant states
that he always intended to file his taxes.
Applicant has been steadily employed in his current position since 2008. (Item 6)
He filed all required federal tax returns in April 2009. (GE 2; AE J)  In December 2011,
he filed the state taxes from the 1990's. (Tr. 110) He has remained in good standing
with the IRS and the state for the past four years. 
As of April 15, 2012, Applicant owed a total federal and state tax debt of
$104,893.13. He owed the IRS $62,515.14 and the state franchise board, $42,377. By
this date, he had made cash payments of $35,253 to the IRS in the following manner.
Through the annual installment plan with the IRS, he has made monthly payments of
$1,250 for a total of $11,250. (AE C) The IRS applied his  refunds from 2008 until 2011
for a total of $8,795. He also received a 1040x credit of $8,795. (AE E) His current
balance to the IRS is $18,852. With his payments and credits, his current balance to
the IRS is $18,852. (AE N) 
Applicant ‘s current balance due to the state franchise tax board is $14,461. He
reduced the balance from $42,377 by paying $3,231 (for tax years 2001-2008), and
cash payments of $9,273 in 2009 and 2011. His debt reduction amounted to
$27,916.06. 
Applicant earns an annual salary of approximately $112,000. After monthly
expenses and debt payments, he has a monthly net remainder of approximately
$1,373. (GE 2) He notes total assets in the amount of $59,460. His 401-(k) is
approximately $55,000. He has rebuilt his credit standing, and his credit score is 730.
(AE K)
Applicant states the most recent personal conduct allegation is a dubious claim
of misconduct that happened five years ago. He admits that he was fired from a large
company, but not for gross misconduct. As to the 2006 incident of furnishing alcohol to
a minor, he states that he had no criminal intent. He states it was a case of entrapment
and the charges were dropped. As to the drug usage, Applicant points to the fact that
the drug usage and related arrest were more than 10 years ago. He notes this was a
low point in his life, but he has completely changed his life. The oldest incident, when
he was a teenage recruit, almost 30 years ago, is the fraudulent enlistment. He states
that he was immature and nothing similar to that has happened again in his life. 
Recommendations
Applicant’s employer for the past five years attests to Applicant’s trustworthiness
and dependability. He is a leader within any development team, and he demonstrates
sound judgment. (AE M) During Applicant’s tenure, he has received a promotion,
bonus, and an award for his achievements. Applicant’s senior software engineer
described Applicant as person of high integrity and responsibility. He is a highly valued
member of the engineering staff. Applicant served as a mentor and provided feedback
to junior engineers. He recommends him for a security clearance. (AE M)
 See also ISCR Case No. 94-1075 at 3-4 (App. Bd. Aug. 10, 1995).      1
 Department of the Navy v. Egan, 484 U.S. 518, 531 (1988).      2
 ISCR Case No. 93-1390 at 7-8 (App. Bd. Jan. 27, 1995).      3
5
Policies
When evaluating an applicant’s suitability for a security clearance, an
administrative judge must consider the adjudicative guidelines (AG). In addition to brief
introductory explanations for each guideline, the adjudicative guidelines list potentially
disqualifying conditions and mitigating conditions. These guidelines are not inflexible
rules of law. Instead, recognizing the complexities of human behavior, they are applied
in conjunction with the factors listed in the adjudicative process. An administrative
judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision.
Under AG ¶ 2(c), this process is a conscientious scrutiny of a number of variables
known as the “whole-person concept.” An administrative judge must consider all
available, reliable information about the person, past and present, favorable and
unfavorable, in making a decision.
The protection of the national security is the paramount consideration. AG ¶ 2(b)
requires that “[a]ny doubt concerning personnel being considered for access to
classified information will be resolved in favor of national security.” In reaching this
decision, I have drawn only those conclusions that are reasonable, logical, and based
on the evidence contained in the record. Likewise, I have avoided drawing inferences
grounded on mere speculation or conjecture.
The Government must present evidence to establish controverted facts alleged
in the SOR. An applicant is responsible for presenting “witnesses and other evidence to
rebut, explain, extenuate, or mitigate facts admitted by applicant or proven by
Department Counsel. . . .”  The burden of proof is something less than a1
preponderance of evidence.  The ultimate burden of persuasion is on the applicant.  2 3
A person seeking access to classified information enters into a fiduciary
relationship with the Government based on trust and confidence. This relationship
transcends normal duty hours and endures throughout off-duty hours. The Government
reposes a high degree of trust and confidence in individuals to whom it grants access to
classified information. Decisions include, by necessity, consideration of the possible risk
the applicant may deliberately or inadvertently fail to protect classified information. Such
decisions entail a certain degree of legally permissible extrapolation of potential, rather
than actual, risk of compromise of classified information.
 
Section 7 of Executive Order 10865 provides that decisions shall be “in terms of
the national interest and shall in no sense be a determination as to the loyalty of the
 See also EO 12968, Section 3.1(b) (listing multiple prerequisites for access to classified or sensitive      4
information), and EO 10865 § 7.
 ISCR Case No. 93-1390 at 7-8 (App. Bd. Jan. 27, 1995).      5
 Id.      6
6
applicant concerned.”  “The clearly consistent standard indicates that security clearance4
determinations should err, if they must, on the side of denials.”  Any reasonable doubt5
about whether an applicant should be allowed access to sensitive information must be
resolved in favor of protecting such information.  The decision to deny an individual a6
security clearance does not necessarily reflect badly on an applicant’s character. It is
merely an indication that the applicant has not met the strict guidelines the President
and the Secretary of Defense established for issuing a clearance.
Analysis
Guideline F, Financial Considerations
AG ¶ 18 expresses the security concern pertaining to financial considerations:
Failure or inability to live within one's means, satisfy debts, and meet
financial obligations may indicate poor self-control, lack of judgment, or
unwillingness to abide by rules and regulations, all of which can raise
questions about an individual's reliability, trustworthiness and ability to
protect classified information. An individual who is financially over-
extended is at risk of having to engage in illegal acts to generate funds. 
AG ¶ 19 describes conditions that could raise a security concern and may be
disqualifying:
(a) inability or unwillingness to satisfy debts;
(b) indebtedness caused by frivolous or irresponsible spending and the
absence of any evidence of willingness or intent to pay the debt or
establish a realistic plan to pay the debt;
(c) a history of not meeting financial obligations;
(d) deceptive or illegal financial practices such as embezzlement,
employee theft, check fraud, income tax evasion, expense account fraud,
filing deceptive loan statements, and other intentional financial breaches
of trust;
7
(e) consistent spending beyond one's means, which may be indicated by
excessive indebtedness, significant negative cash flow, high debt-to-
income ratio, and/or other financial analysis;
(f) financial problems that are linked to drug abuse, alcoholism, gambling
problems, or other issues of security concern;
(g) failure to file annual Federal, state, or local income tax returns as
required or the fraudulent filing of the same;
(h) unexplained affluence, as shown by a lifestyle or standard of living,
increase in net worth, or money transfers that cannot be explained by
subject's known legal sources of income; and
(i) compulsive or addictive gambling as indicated by an unsuccessful
attempt to stop gambling, "chasing losses" (i.e. increasing the bets or
returning another day in an effort to get even), concealment of gambling
losses, borrowing money to fund gambling or pay gambling debts, family
conflict or other problems caused by gambling.
Applicant admits to not filing his federal and state tax returns from 1994 through
2007. As a result, he incurred federal and state tax liens. His federal tax debt was
originally approximately $120,000 and his state tax debt approximately $43,000. The
debts are confirmed in the exhibits. Applicant did not file the tax returns until 2009 and
2011. Consequently, the evidence is sufficient to raise disqualifying conditions ¶¶ 19(a),
19(c)and 19(g).
AG ¶ 20 provides conditions that could mitigate security concerns:
(a) the behavior happened so long ago, was so infrequent, or occurred
under such circumstances that it is unlikely to recur and does not cast
doubt on the individual's current reliability, trustworthiness, or good
judgment;
(b) the conditions that resulted in the financial problem were largely
beyond the person's control (e.g., loss of employment, a business
downturn, unexpected medical emergency, or a death, divorce or
separation), and the individual acted responsibly under the circumstances;
(c) the person has received or is receiving counseling for the problem
and/or there are clear indications that the problem is being resolved or is
under control;
(d) the individual initiated a good-faith effort to repay overdue creditors or
otherwise resolve debts;
8
(e) the individual has a reasonable basis to dispute the legitimacy of the
past-due debt which is the cause of the problem and provides
documented proof to substantiate the basis of the dispute or provides
evidence of actions to resolve the issue; and
(f) the affluence resulted from a legal source of income.
Applicant’s failure to file federal and state taxes continued for many years. His
reasoning for failing to file varied. Granted he was unemployed for a period of time, but
he did not state that was the reason he did not file. He had federal and state tax liens
filed against him. He claimed he had intentions to file and pay, but he did not.  After
applying for a security clearance and going through the investigative process, Applicant
decided to file his federal government and state tax returns in April 2009 and in 2011.
He initiated payments to both the federal and state. He has reduced his tax liability
through his cash payments and an installment agreement. He has filed taxes for the
past four years, and he has good intentions to pay his delinquent debts. He has been
gainfully employed since 2008, and he has not raised any circumstances beyond his
control that would contribute to his financial problems. He still has significant tax liability.
Applicant receives partial credit under AG 20(c)and 20(d). None of the other mitigating
conditions apply.
 Guideline E, Personal Conduct
AG ¶ 15 expresses the security concern pertaining to personal conduct:
Conduct involving questionable judgment, lack of candor, dishonesty, or
unwillingness to comply with rules and regulations can raise questions
about an individual’s reliability, trustworthiness, and ability to protect
classified information.
AG ¶ 16 describes conditions that could raise a security concern and may be
disqualifying:
(a) deliberate omission, concealment, or falsification of relevant facts from
any personnel security questionnaire, personal history statement, or
similar form used to conduct investigations, determine employment
qualifications, award benefits or status, determine security clearance
eligibility or trustworthiness, or award fiduciary responsibilities;
(b) deliberately providing false or misleading information concerning
relevant facts to an employer, investigator, security official, competent
medical authority, or other official government representative;
(c) credible adverse information in several adjudicative issue areas that is
not sufficient for an adverse determination under any other single
guideline, but which, when considered as a whole, supports a whole-
person assessment of questionable judgment, untrustworthiness,
9
unreliability, lack of candor, unwillingness to comply with rules and
regulations, or other characteristics indicating that the person may not
properly safeguard protected information;
(d) credible adverse information that is not explicitly covered under any
other guideline and may not be sufficient by itself for an adverse
determination, but which, when combined with all available information
supports a whole-person assessment of questionable judgment,
untrustworthiness, unreliability, lack of candor, unwillingness to comply
with rules and regulations, or other characteristics indicating that the
person may not properly safeguard protected information. This includes
but is not limited to consideration of:
(1) untrustworthy or unreliable behavior to include breach of
client confidentiality, release of proprietary information,
unauthorized release of sensitive corporate or other
government protected information;
(2) disruptive, violent, or other inappropriate behavior in the
workplace; 
(3) a pattern of dishonesty or rule violations; and
(4) evidence of significant misuse of Government or other
employer's time or resources.
(e) personal conduct, or concealment of information about one's conduct,
that creates a vulnerability to exploitation, manipulation, or duress, such
as (1) engaging in activities which, if known, may affect the person's
personal, professional, or community standing, or (2) while in another
country, engaging in any activity that is illegal in that country or that is
legal in that country but illegal in the United States and may serve as a
basis for exploitation or pressure by the foreign security or intelligence
service or other group;
(f) violation of a written or recorded commitment made by the individual to
the employer as a condition of employment; and
(g) association with persons involved in criminal activity. 
Applicant’s behavior concerning his financial responsibility and his criminal
conduct shows lack of judgment, reliability and trustworthiness over a period of many
years. AG ¶¶ 16(a), 16(c),16(d) and 16(e) apply. His conduct shows a pattern of poor
judgment and reliability. He made a deliberate choice not to file his taxes. He also did
not set aside sufficient money to pay taxes when he was a contractor. For 15 years,
Applicant ignored his legal obligation as a tax payer. He deliberately did not disclose his
2001 drug arrest on his security clearance application. He used an illegal drug as an
10
adult for one year. He was arrested in 2006, but claims it was entrapment. He has
rationalized his behavior in every instance. Granted, he has not used illegal drugs since
2001 and his last arrest was several years ago. However, there is a clear pattern of
putting himself above the law.  
AG ¶ 17 provides conditions that could mitigate security concerns:
(a) the individual made prompt, good-faith efforts to correct the omission,
concealment, or falsification before being confronted with the facts;
(b) the refusal or failure to cooperate, omission, or concealment was
caused or significantly contributed to by improper or inadequate advice of
authorized personnel or legal counsel advising or instructing the individual
specifically concerning the security clearance process. Upon being made
aware of the requirement to cooperate or provide the information, the
individual cooperated fully and truthfully;
(c) the offense is so minor, or so much time has passed, or the behavior is
so infrequent, or it happened under such unique circumstances that it is
unlikely to recur and does not cast doubt on the individual's reliability,
trustworthiness, or good judgment;
(d) the individual has acknowledged the behavior and obtained counseling
to change the behavior or taken other positive steps to alleviate the
stressors, circumstances, or factors that caused untrustworthy, unreliable,
or other inappropriate behavior, and such behavior is unlikely to recur;
(e) the individual has taken positive steps to reduce or eliminate
vulnerability to exploitation, manipulation, or duress;
(f) the information was unsubstantiated or from a source of questionable
reliability; and
(g) association with persons involved in criminal activity has ceased or
occurs under circumstances that do not cast doubt upon the individual's
reliability, trustworthiness, judgment, or willingness to comply with rules
and regulations.
Applicant admitted his criminal conduct in some cases, but he had
rationalizations or excuses as to why it occurred. It is true that his last use of illegal
drugs was in 2001, and he does not associate with drug users. He did not list the drug
arrest on his 2008 security clearance application. He has not presented any other
information to persuade me that he has mitigated personal conduct concerns.  I have
doubts about his judgment and reliability. After considering the mitigating conditions
outlined in AG ¶ 17, I conclude Applicant has not mitigated the security concern under
personal conduct. 
11
Whole-Person Concept
Under the whole-person concept, the administrative judge must evaluate an
applicant’s eligibility for a security clearance by considering the totality of an applicant’s
conduct and all the circumstances. The administrative judge should consider the nine
adjudicative process factors listed at AG ¶ 2(a): 
(1) the nature, extent, and seriousness of the conduct; (2) the
circumstances surrounding the conduct, to include knowledgeable
participation; (3) the frequency and recency of the conduct; (4) the
individual’s age and maturity at the time of the conduct; (5) the extent to
which participation is voluntary; (6) the presence or absence of
rehabilitation and other permanent behavioral changes; (7) the motivation
for the conduct; (8) the potential for pressure, coercion, exploitation, or
duress; and (9) the likelihood of continuation or recurrence. 
Under AG ¶ 2(c), the ultimate determination of whether to grant eligibility for a
security clearance must be an overall commonsense judgment based upon careful
consideration of the guidelines and the whole-person concept. As noted above, the
ultimate burden of persuasion is on the applicant seeking a security clearance. 
I considered the potentially disqualifying and mitigating conditions in light of all
the facts and circumstances surrounding this case, as well as the whole-person factors.
Applicant is an intelligent person. He has recommendations from his current employer.
He has reduced his tax liability since he started payments in 2009. He is in good
standing with the federal and state tax authorities. He admits it was a mistake to use
methamphatamines in 2001. He has not used illegal drugs since that time. His last
arrest was in 2006.  
Applicant has a lengthy history of questionable judgment in the personal arena
and the financial arena. He did not address his tax liability until after the security
investigative process started in 2008. He deliberately omitted information on his 2008
security clearance application. At this point, I have doubts about his judgment and
reliability. Any doubts must be resolved in favor of the Government. Applicant has not
met his burden in this case. He has not mitigated the security concerns under financial
considerations and personal conduct. Clearance is denied.
Formal Findings
Formal findings for or against Applicant on the allegations set forth in the SOR,
as required by section E3.1.25 of Enclosure 3 of the Directive, are:
Paragraph 1, Guideline F: AGAINST APPLICANT
Subparagraphs 1.a-1.e: Against Applicant
Paragraph 2, Guideline E: AGAINST APPLICANT
12
Subparagraphs 2.a-2.j: Against Applicant
Conclusion
In light of all of the circumstances presented by the record in this case, it is not
clearly consistent with the national interest to grant Applicant a security clearance.
Clearance is denied. 
                                                     
NOREEN A. LYNCH
Administrative Judge